Phexit: A Beginner’s Guide

Watch out all London insurance dispute specialists! It turns out it is not only the financiers of Dublin. Frankfurt and Paris who are relishing current opportunities.

When the American Bar Association’s Insurance Litigation Section meets in Tucson Arizona on 1st March delegates will be offered a number of fascinating break-out discussions (including one on timely notification of claims with the irresistible title It’s Too Late Baby, Now It’s Too Late).

But the eye-catcher is this one scheduled for 12.05pm:

Breakout: “PHEXIT”: Why Policyholders May Pull Out of Britain and Why London May Be at Risk of Losing Its Grip on Insurance Coverage Arbitrations

Phexit. You heard it here first.

J. G . Mean and (Brackets)

My mediations are haunted by a fellow called J. G. Mean who just keeps cropping up. I can be as creative as I like but all too soon JG is there in the room. You encourage some venting, explore various forms of reality, re-frame a little, season the whole boiling with some cognitive dissonance and stand well back – only for somebody to say, “Just Get Me A Number!”.

Now there are various antidotes to JG*. (And in the right place, at the right time JG can be hugely welcome.) But the antidote I have always wanted to try is The Bracket.

We have known for many years that our colleagues in the US were using brackets routinely and successfully to settle cases. I have used them myself, just not in this country. This is the process whereby rather than simply trading offer and counter-offer a party makes a conditional offer: “I will go to £500,000 but only if you come down to £1 million” or more simply says, “My bracket is £500,000 to £1 million. Will they work in that bracket?”.

A word of warning here to our transatlantic readers. If you persevere with this post you will learn nothing. Indeed you may  feel rather like Roger Federer reading a schoolboy’s over-excited essay about his first tennis lesson: simplistic  and with the odd  mistake. Apologies

My own attempts to promote the use of brackets in London have met with abject failure. The parties and their advisors look at me as if I have just suggested trial by combat. “(Sigh) Just get me a number, Bill”

That is, until last week.

Now it is true that last week circumstances were not entirely typical.

First, there were US as well as London lawyers in both rooms so each side had a source of comfort and reassurance as they faced this unusual and discomfiting challenge. Some may object that the record is therefore wind-assisted.

Second, I have to say the mediator was unusually persuasive. Sensing that the door was just slightly ajar I came up with this successful formulation: “Please, please, please be my first London mediation to settle using brackets”. I’ve always thought abject supplication was an effective dispute resolution technique and so it proved in this case.

The magic of brackets, I can now tell you on the basis of extensive experience, turns out to be “the mid-point”.

Of course, in one sense a bracket is at best a conditional offer of the lower figure in the bracket. And the “condition” usually remains unfulfilled. This is because the counter-proposal tends to be another different bracket. So the response in the above example might be: “No we can’t accept your bracket. But we will come down to £1.4 million if you come up to £800,000.”

At a purely prosaic level nothing much has been achieved. But there is poetry here if you look for it. Turns out the bracket connoisseurs are keeping an eye on the mid-point because the most important message of the bracket is that the mid-point of the range is implicitly being signalled as the killing zone for the deal.  The parties tend (at least in private) to say “I have moved my midpoint” more readily than they say they have moved the bracket itself. “She must like my mid-point”, they muse to the mediator.

The midpoint is not being formally offered. It is not even being referred to explicitly. But it shimmers temptingly in the half-light of the negotiations.

Since last week’s triumph things are back to normal. I have once again failed to sell brackets in a couple of purely domestic mediations (“JG! How nice to see you!”). The gleam in my eye is no doubt even more off-putting than before.

Because I have seen the future. Brackets will be here soon, with no more than the customary time-lag, just like hamburgers, rock ‘n’ roll and indeed mediation itself before them.

And they work!

*The best of them set out in the excellent “Making Money Talk” by J Anderson Little

John Sturrock reflects

… on Edinburgh, London and the challenges facing mediation everywhere….

John Sturrock QC, the founder of Core Solutions in Edinburgh and “Scotland’s finest mediator” (Legal 500) has now been a central member of the Brick Court team for two years.

I caught up with John on his way to the airport. He had just left a foreshortened Select Committee meeting on Brexit at Westminster, which he had been facilitating in his Special Adviser role (the General Election announcement had distracted his intended audience). He was flying to San Francisco to speak at an American Bar Association Dispute Resolution conference before going on to Memphis, Tennessee for the International Academy of Mediators conference. Such is the life of a mediation thought-leader!

Q : John what kind of litigation practice did you have at the Edinburgh Bar in the days before mediation discovered you? Have you left those experiences behind or do they still inform the work you do?

 I had a busy and varied civil and commercial practice. We tend to specialise less at the Scottish Bar so my portfolio included a wide range corporate and commercial work. That gives me a really good insight as a mediator into many different types of case.

So I was junior counsel in the then largest patent action in the Scottish courts. I handled major litigation arising out of the tobacco and pharmaceutical industries, property valuation (including petro-chemical plants, large entertainment venues and football stadiums!), banking, oil and gas, construction, planning, judicial review and the usual range of professional indemnity cases involving all sorts of disciplines. Along the way I paid a visit to the House of Lords in which my argument as junior counsel for the appellant on the matter of foreseeability prevailed – a moment of pleasure not to be shared overtly with my learned senior!!

Q : Scotland, not least because of your own efforts, has become something of a mecca for dispute resolution and mediation in particular. Do you have a sense that Scotland punches above its weight in ADR matters? Modesty aside how has this come about?

I think we need to be realistic. Scotland has seen a really significant rise in the use of mediation in commercial cases. And, yes, like you Bill, having left litigation practice to work full time in mediation and dispute resolution, I take some pleasure in that development, in which I have invested my professional career for over fifteen years. But we are still behind other jurisdictions in judicial support.

I sense this is changing now with a quite radical new leadership in our courts. However, this means that I often mediate in situations where the parties are choosing to do so because they want to – not because a court will penalise them for not doing so – and also earlier when more imaginative approaches can be taken. I am a great believer in making best use of the mediation process to help the key players achieve really useful results for their business.

Q : You were busy mediating in London well before you joined Chambers. But I wonder what differences you notice between London and other mediation environments in which you work in terms of the way parties participate in mediations and in their expectations of you?

Interesting question. I sense that there is greater expectation that there are particular ways in which mediators will act. Sometimes there is a more pro forma way which people have developed over a number of years and through great experience. I think one needs to be sensitive to that and the benefits which people have seen accrue. On the other hand, one of the themes at the ABA conference is likely to be the extent to which mediation in the US (especially in Southern California) has become formulaic and the province of the litigation profession. The fear expressed in the US is that mediation is now just a tool for use to achieve (or broker) late settlement. Indeed, they are proposing an alternative “early dispute resolution” model which seems to be just mediation carried out early! We need to avoid falling into the trap of being too predictable , I suggest.

Q : You must have one of the most varied portfolios of any ADR professional that I can think of, with a practice reaching into government, political parties, policy, the environment, churches, industry, as well as covering the narrow litigation-centred world I work in. Do they all complement each other and spark off each other or do you simply have to wear a different head for each of them?

The fundamentals are the same I think. The human condition, by definition, is universal. They say that there are only five themes in Hollywood! The facts and circumstances differ, the emotional component is expressed differently, the players have different drivers, and so on. But the beauty of our role is that, because we enablers and not fixers, we can draw on these many experiences and often use a technique or approach from another environment to help in the instant case. I seek to adapt to the “culture” wherever I am or whatever I am asked to deal with, and that means avoiding stereotyping or assuming that any situation fits into a particular box.

So, there is a sense of each mediation (or “facilitation”, if the “m” word is not the right one) providing a rich resource for all the others. You use the word “spark”: I think that is really important. When we are at our best as mediators, our job is to help spark others into new ways of approaching difficult problems and to do so with energy and commitment. I regard myself as very fortunate to work with such a diverse range of people and issues.

Next time I talk to our New Zealand-based mediator, Geoff Sharp

 

Rasputin the Mediator

We often try to identify heroes and thought leaders in the mediation community, often without success. While at first sight it may seem strange a description of the Tsarist mystic, Rasputin struck a chord with me the other day.

His story remains astonishing even after all the previous tellings…He suddenly broke with family routine embarking on several years of pilgrimage, returning home only intermittently. This period of spiritual quest and adventure honed his gift of psychological insight and persuasion: as he wandered from one set of strangers to another, he learned to assess them rapidly, speak to their fears and concerns, and exude rough-hewn sanctity [1]

Okay, not all of us have got our “rough-hewn sanctity” nailed down quite yet. But the rest of it seems on point.

Moreover, it turns out that Rasputin was in fact frequently ignored by the Romanovs who he was popularly supposed to hold in his thrall. It was probably Rasputin who advised the Tsar shortly before the revolution that he needed to regain the confidence of his people. “Nonsense”, replied Nicholas, “It is they who must regain my confidence”.

Well we have all had private sessions like that.

A new mediation thought leader?

I give you Grigori Yefimovich Rasputin.

[1] Full of Ecstasy and Fire, Stephen Lovell, Times Literary Supplement 
17th February 2017

These things happen in mediation…

sony_emoji_bTowards the end of a long day’s mediation the two  principals met together and managed to agree a settlement.

As they emerged from their meeting one of them took me to one side and told me how unhappy he was with the deal. I sympathised but resorted of course to the old platitude: “Well a good mediation always ends with both parties unhappy to some degree”.

At that point we both heard the sound of wild cheering breaking out in the room where the other principal was announcing the result of his discussions to his team.